Watchdog slams UK offender tagging procurement

A watchdog has slammed the procurement processes around the development of a new UK electronic offender tagging system.

In a report the National Audit Office (NAO) criticised the Ministry of Justice’s (MoJ) delivery model, its treatment of SME suppliers and its failed pursuit of a particular technology when there was no proven need for it.

The NAO said the planned timescale for the programme was unachievable, with the MoJ initially allowing 15 months after signing contracts in 2012 to develop, test, manufacture and deploy the new tags. Contracts were not in fact signed until 2014 due to the discovery of overbilling by G4S and Serco.

G4S has now been appointed as preferred bidder for the tags, which are expected to be deployed from the end of 2018, representing a delay to the programme of five years.

The project was expected to reduce annual monitoring costs by between £9m and £30m but the MoJ has so far spent £60m and remains reliant on the legacy system. The MoJ has reported savings of 10.6% by negotiating with Capita, the new monitoring supplier.

“The NAO finds that the ministry adopted a new high-risk and unfamiliar approach to the procurement and failed to manage the implications,” said the report.

The NAO said the MoJ embarked on a project to develop new tags in 2011 that would include both GPS and radio frequency tracking capabilities, technologies that are already available in existing products but not combined in a single unit.

A “tower” delivery model was decided on, where four different suppliers would be used to develop different aspects of the service, comprising making the new tags, fitting and monitoring them, processing the data they generated and providing the mobile data network. A contractor “integrator” would pull together all the different aspects of the service.

However, because of disputes between the parties over their responsibilities the MoJ has decided to bring this integrator role in-house, though the NAO cast doubt over its ability in this regard. “It will have to build its technical and programme management capabilities quickly to perform this expanded role effectively,” said the NAO.

“The ministry’s governance arrangements were weak, resulting in slow decision-making and allowing internal disagreements to persist,” said the report.

The report said contracts with two SME tag suppliers broke down because the MoJ’s “bespoke requirements for world-leading tags proved too ambitious”.

The NAO said the MoJ had now resolved disagreements with suppliers, resulting in a £4.4m settlement with tag supplier Steatite and a “broadly break-even settlement with Capita for its monitoring contract”.

The report said reviews of the project in 2015 and 2016 resulted in action to address many of the issues, including buying off-the-shelf tags, and leadership is “now more stable and cohesive”.

The service is expected to cost £470m between 2017-18 and 2024-25.

A MoJ spokesperson said there were “challenges in the delivery of the electronic monitoring programme between 2010 and 2015”.

“As a direct result, we fundamentally changed our approach in 2015, expanding and strengthening our commercial teams and bringing responsibility for oversight of the programme in-house.

“We are now in a strong position to continue improving confidence in the new service and providing better for value for money for the taxpayer.”